SOURCE: Sutron Corporation

Sutron Corporation

May 07, 2013 18:51 ET

Sutron Reports First Quarter 2013 Results

STERLING, VA--(Marketwired - May 7, 2013) -  Sutron Corporation (NASDAQ: STRN) today announced results for the first quarter ended March 31, 2013.

First Quarter 2013 Highlights

  • Revenue increased 73% to a first quarter record of $6.5 million

  • Net Income increased 140% to $30,202

  • EBITDA increased 632% to $171,924

  • Completed acquisition of Sabio Instruments on March 6, 2013

Sutron reported record revenue of $6.5 million for the first quarter of 2013, up 73% from $3.7 million in the first quarter of 2012. The drivers of the increase were $1.7 million in revenue generated from our MeteoStar Division (acquired in May 2012), an increase of approximately $350,000 in standard product revenues and an increase of approximately $567,000 in systems revenues. Our new Sabio Division, which was acquired on March 6, 2013, contributed revenues of approximately $74,000 for the quarter.

Net income for the first quarter of fiscal year 2013 was $30,202, an increase of 140% compared to a net loss of $76,109 in the first quarter of fiscal year 2012. Earnings per share were $0.01 per basic and diluted share as compared to a loss of $0.02 per share in the first quarter of 2012. Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") were approximately $172,000 as compared to negative EBITDA of approximately $32,000 in the first quarter of 2012. 

The Company's backlog as of March 31, 2013 was approximately $13.2 million, up 6% from the backlog as of March 31, 2012.

Balance Sheet and Liquidity

Sutron ended the first quarter of 2013 with $5 million in cash and cash equivalents, down from $8.4 million at December 31, 2012. Cash used by operating activities in the first quarter of 2013 was $2.1 million as compared to cash generated by operating activities in the first quarter of 2012 of $1.9 million. The principal components of the use of cash in the first quarter of 2013 were the build-up of accounts receivable (approximately $1.5 million) and increase in supplier prepayments (approximately $614,000). Capital expenditures were $95,108 in the first quarter of 2013 compared to $0 in the first quarter of 2012. 

As a consequence, Free Cash Flow in the first quarter of 2013 was negative in the amount of $2,153,747 compared to Free Cash Flow of $1,875,341 in the first quarter of 2012. Sutron defines Free Cash Flow as net cash provided or used by operating activities less cash used in the purchase of property and equipment. 

Cash used during the first quarter of fiscal year 2013 to acquire Sabio Instruments was approximately $1.2 million. Cash used to acquire Sabio is reflected in investing activities in the statement of cash flows.

Management Commentary

"We are encouraged by our first quarter results, especially to report record first quarter revenue of $6.5 million, up 73% from the prior year quarter," noted Raul McQuivey, Chairman and Chief Executive Officer. "The revenue increase was derived from strong organic growth as well as from recent acquisitions. Our focus in 2013 will again be to drive revenue growth and also to achieve steady improvement in our operating margins and net income. We are able to pursue new opportunities domestically and internationally to cross-market our diverse portfolio of products, systems and software that have been significantly enhanced through our newly-acquired MeteoStar and Sabio Divisions. Our business remains highly project driven through competitive tender and, thus, we expect periodic fluctuations in bookings and revenue due to the uncertain timing of governmental approval and funding processes."

Conference Call

The Company will host a conference call on May 8, 2013 at 1:45 p.m. Eastern Time during its Annual Shareholders Meeting to discuss its recent acquisitions, its strategic direction and focus and to review the results for fiscal year 2012 and the first quarter of 2013. The conference call can be accessed via or by dialing (213) 289-0012, Access Code: 985-676-629 (Audio PIN: Shown after joining the meeting, Meeting ID: 985-676-629).

About Sutron

Sutron Corporation, headquartered in Sterling, Virginia, is a project driven business. We provide hydrological, meteorological, oceanic and aviation real-time data collection products, systems, software and services to a diversified customer base of federal, state, local and foreign governments, engineering companies, universities, hydropower companies and other commercial entities. Our quarterly results may fluctuate substantially based upon contract awards that are difficult to project in terms of timing and may be delayed due to differing time frames in securing government approvals and funding. 

Safe Harbor Statement

The statements in this press release that relate to future plans, events or performance are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Forward-looking statements include without limitation any statements regarding our expected future financial position, results of operations, cash flows, EBITDA, financing plans, business strategy, bookings, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "should" and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. We are under no obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

Sutron Corporation  
Unaudited Consolidated Statements of Income  
    Three Months Ended
March 31,
    2013     2012  
Net revenues   $ 6,455,110     $ 3,737,181  
Cost of revenues     3,808,969       2,310,589  
    Gross profit     2,646,141       1,426,592  
Operating expenses:                
  Selling, general and administrative expenses     1,634,003       1,004,816  
  Research and development expenses     970,139       553,269  
    Total operating expenses     2,604,142       1,558,085  
    Operating income     41,999       (131,493 )
Financing income, net     3,203       11,384  
    Income before income taxes     45,202       (120,109 )
Income tax expense     15,000       (44,000 )
Net income   $ 30,202     $ (76,109 )
Net income per share:                
    Basic income per share   $ 0.01     $ (0.02 )
    Diluted income per share   $ 0.01     $ (0.02 )
Sutron Corporation  
Consolidated Balance Sheets  
    (Unaudited)     (Audited)  
    March 31,     December 31,  
2013     2012  
Current Assets:                
  Cash and cash equivalents   $ 4,293,399     $ 7,576,374  
  Restricted cash and cash equivalents     748,696       810,396  
  Accounts receivable, net     7,301,877       5,771,013  
  Inventory     4,608,824       4,291,505  
  Prepaid items and other assets     885,577       248,546  
  Income taxes receivable     1,230,177       1,202,709  
  Deferred income taxes     711,000       666,000  
    Total Current Assets     19,779,550       20,566,543  
Property and Equipment, Net     1,706,503       1,698,218  
Other Assets                
  Goodwill     4,754,152       3,768,435  
  Intangibles, net of amortization     748,048       781,633  
  Other Assets     93,758       95,217  
    Total Assets   $ 27,082,011     $ 26,910,046  
Current Liabilities:                
  Accounts payable   $ 1,361,115     $ 1,300,917  
  Accrued payroll     245,668       464,942  
  Deferred revenue     446,870       531,397  
  Other accrued expenses     1,349,907       1,134,279  
  Billings in excess of costs and estimated earnings     437,865       306,148  
    Total Current Liabilities     3,841,425       3,737,683  
Long-Term Liabilities                
  Deferred rent     921,443       1,006,893  
  Deferred income taxes     98,000       39,000  
    Total Long-term Liabilities     1,019,443       1,045,893  
    Total Liabilities     4,860,868       4,783,576  
Stockholders' Equity                
  Common stock, 12,000,000 shares authorized; 5,057,009 and 5,039,632 issued and outstanding     50,469       50,397  
  Additional paid-in capital     5,245,707       5,185,325  
  Retained earnings     17,103,553       17,073,351  
  Accumulated other comprehensive loss     (178,586 )     (182,603 )
    Total Stockholders' Equity     22,221,143       22,126,470  
    Total Liabilities and Stockholders' Equity   $ 27,082,011     $ 26,910,046  
Sutron Corporation  
Unaudited Consolidated Statements of Cash Flows  
    Three Months Ended
March 31,
    2013     2012  
Cash Flows from Operating Activities:                
Net income   $ 30,202     $ (76,109 )
Noncash items included in net income:                
  Depreciation and amortization     129,925       99,182  
  Deferred income taxes     23,000       (12,000 )
  Stock based compensation     42,528       24,978  
  Tax benefit from stock options exercised     (12,996 )     (3,093
Change in current assets and liabilities:                
  Accounts receivable     (1,448,011 )     2,601,836  
  Inventory     (150,221 )     (701,607 )
  Prepaid items and other assets     (633,764 )     6,754  
  Income taxes receivable     (14,472 )     (165,499
  Accounts payable     60,198       105,867  
  Accrued expenses     (46,768 )     (146,482 )
  Deferred revenues     (84,527 )     (9,853 )
  Billings in excess of costs and estimated earnings     131,717       147,063  
  Deferred rent     (85,450 )     2,211  
Net Cash Provided (Used) by Operating Activities     (2,058,639 )     1,873,248  
Cash Flows from Investing Activities:                
  Restricted cash and cash equivalents     61,700       34,274  
  Purchase of property and equipment     (95,108 )     2,093  
  Certificate of deposit     -       (966 )
  Other assets     1,459       3,606  
  Acquisition and goodwill     (1,214,330 )     -  
Net Cash Provided (Used) by Investing Activities     (1,246,279 )     39,007  
Cash Flows from Financing Activities:                
  Tax benefit from stock options exercised     12,996       3,093  
  Proceeds from stock options exercised     4,930       22,250  
Net Cash Provided (Used) by Financing Activities     17,926       25,343  
Effect of exchange rate changes on cash and cash equivalents     4,017       35,621  
Net increase (decrease) in cash and cash equivalents     (3,282,975 )     1,973,219  
Cash and Cash Equivalents, beginning of period     7,576,374       8,737,543  
Cash and Cash Equivalents, end of period   $ 4,293,399     $ 10,710,762  

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